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Stay up-to-date with all quarterly releases: See ZacksEarnings Calendar.
Shares of the company rose more than 5% in pre-market trading on better-than-expected results.
Results benefited from the solid performance of the asset management business, which drove revenues. Also, higher net interest revenues acted as a tailwind. The absence of fee waivers, lower GAAP expenses and solid brokerage account numbers were other positives.
Results excluded transaction-related and restructuring costs. After considering these, net income (GAAP basis) was $1.84 billion or 94 cents per share, up from $1.05 billion or 51 cents per share in the year-ago quarter. We had projected net income (GAAP) of $1.61 billion.
For 2024, adjusted earnings were $3.25 per share, outpacing the consensus estimate of $3.16 and rising 4% year over year. Net income (GAAP basis) was $5.94 billion or $2.99 per share, up from $5.07 billion or $2.54 per share in 2023. We had projected net income (GAAP) of $5.71 billion for the year.
SCHW’s Revenues Up, GAAP Expenses Fall
Quarterly net revenues were $5.33 billion, which rose 20% year over year. The increase was driven by a rise in all revenue components. The top line surpassed the Zacks Consensus Estimate of $5.18 billion.
Net revenues in 2024 grew 4% to $19.61 billion. The top line also beat the consensus estimate of $19.46 billion.
Total non-interest expenses (GAAP basis) decreased 7% to $3.02 billion. We had projected this metric to be $2.97 billion. Excluding non-recurring items, adjusted total expenses were $2.85 billion, relatively stable year over year.
The pre-tax profit margin increased to 43.3% from 26.8% in the prior-year quarter.
At the end of the fourth quarter, Charles Schwab’s average interest-earning assets decreased 3% to $426.4 billion. Our estimate for the metric was $425.4 billion.
As of Dec. 31, 2024, the annualized return on equity was 18%, up from 12% in the prior-year quarter.
Schwab’s Other Business Metrics
As of Dec. 31, 2024, Schwab had total client assets of $10.1 trillion (up 19% year over year). During the reported quarter, net new assets — brought by new and existing clients — were $108.4 billion.
Schwab added 1.11 million new brokerage accounts during the quarter. As of Dec. 31, 2024, the company had 36.5 million active brokerage accounts, 2 million banking accounts and 5.4 million corporate retirement plan participants.
Our Take on Schwab
A steady decline in funding costs and lower rates will support Schwab’s margins. Strategic acquisitions, a rise in advice solution fees and sustainable capital distributions are other major positives.
The Charles Schwab Corporation Price, Consensus and EPS Surprise
Raymond James (RJF - Free Report) is scheduled to announce quarterly numbers on Jan. 29.
Over the past 30 days, the Zacks Consensus Estimate for Raymond James’ quarterly earnings has been revised 1.5% upward to $2.75, suggesting a 14.9% rise from the prior-year reported number.
LPL Financial (LPLA - Free Report) is set to announce fourth-quarter and full-year 2024 numbers on Jan. 30.
Over the past month, the Zacks Consensus Estimate for LPL Financial’s quarterly earnings has moved marginally lower to $3.88, implying 10.5% growth from the prior-year quarter.
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Schwab's Q4 Earnings and Revenue Beat, Expenses Fall, Stock Gains
Charles Schwab’s (SCHW - Free Report) fourth-quarter 2024 adjusted earnings of $1.01 per share beat the Zacks Consensus Estimate of 90 cents. The bottom line jumped 49% year over year.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Shares of the company rose more than 5% in pre-market trading on better-than-expected results.
Results benefited from the solid performance of the asset management business, which drove revenues. Also, higher net interest revenues acted as a tailwind. The absence of fee waivers, lower GAAP expenses and solid brokerage account numbers were other positives.
Results excluded transaction-related and restructuring costs. After considering these, net income (GAAP basis) was $1.84 billion or 94 cents per share, up from $1.05 billion or 51 cents per share in the year-ago quarter. We had projected net income (GAAP) of $1.61 billion.
For 2024, adjusted earnings were $3.25 per share, outpacing the consensus estimate of $3.16 and rising 4% year over year. Net income (GAAP basis) was $5.94 billion or $2.99 per share, up from $5.07 billion or $2.54 per share in 2023. We had projected net income (GAAP) of $5.71 billion for the year.
SCHW’s Revenues Up, GAAP Expenses Fall
Quarterly net revenues were $5.33 billion, which rose 20% year over year. The increase was driven by a rise in all revenue components. The top line surpassed the Zacks Consensus Estimate of $5.18 billion.
Net revenues in 2024 grew 4% to $19.61 billion. The top line also beat the consensus estimate of $19.46 billion.
Total non-interest expenses (GAAP basis) decreased 7% to $3.02 billion. We had projected this metric to be $2.97 billion. Excluding non-recurring items, adjusted total expenses were $2.85 billion, relatively stable year over year.
The pre-tax profit margin increased to 43.3% from 26.8% in the prior-year quarter.
At the end of the fourth quarter, Charles Schwab’s average interest-earning assets decreased 3% to $426.4 billion. Our estimate for the metric was $425.4 billion.
As of Dec. 31, 2024, the annualized return on equity was 18%, up from 12% in the prior-year quarter.
Schwab’s Other Business Metrics
As of Dec. 31, 2024, Schwab had total client assets of $10.1 trillion (up 19% year over year). During the reported quarter, net new assets — brought by new and existing clients — were $108.4 billion.
Schwab added 1.11 million new brokerage accounts during the quarter. As of Dec. 31, 2024, the company had 36.5 million active brokerage accounts, 2 million banking accounts and 5.4 million corporate retirement plan participants.
Our Take on Schwab
A steady decline in funding costs and lower rates will support Schwab’s margins. Strategic acquisitions, a rise in advice solution fees and sustainable capital distributions are other major positives.
The Charles Schwab Corporation Price, Consensus and EPS Surprise
The Charles Schwab Corporation price-consensus-eps-surprise-chart | The Charles Schwab Corporation Quote
Currently, Charles Schwab carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Schwab's Peers
Raymond James (RJF - Free Report) is scheduled to announce quarterly numbers on Jan. 29.
Over the past 30 days, the Zacks Consensus Estimate for Raymond James’ quarterly earnings has been revised 1.5% upward to $2.75, suggesting a 14.9% rise from the prior-year reported number.
LPL Financial (LPLA - Free Report) is set to announce fourth-quarter and full-year 2024 numbers on Jan. 30.
Over the past month, the Zacks Consensus Estimate for LPL Financial’s quarterly earnings has moved marginally lower to $3.88, implying 10.5% growth from the prior-year quarter.